Yereth Rosen/States Newsroom
On Thursday, the U.S. Bureau of Economic Analysis released its Personal Consumption Expenditures (PCE) Report for September 2024, showcasing progress on lowering inflation as the nation nearly meets its goal of getting inflation down to 2%.
According to the report the PCE price index has increased 2.1% when compared to September 2023, nearly meeting the Federal Reserve’s target of 2% inflation. Over this period prices for goods decreased 1.2% and prices for services increased 3.7%. Food prices increased 1.2% while energy prices decreased 8.1%.
With the COVID-19 pandemic shocking the global economy, causing massive job losses and a sharp downturn of economic activity. As economic activity resumed, increasing inflation created concerns in the nation’s economic recovery, with the PCE price index increases peaking at 7% in June 2022 when compared to the previous year. However, PCE increases have cooled over the past two years.
“Inflation has now fallen to 2.1% — nearly at its 2% target. While critics said we needed a recession to lower inflation, instead inflation has come down while our economy has grown more than 12% over the course of my Administration — the fastest rate of any presidential term in the 21st century. Incomes are up almost $4,000 after accounting for inflation, and gas prices are down to $3.13 per gallon and below $3 in 21 states,” President Joe Biden said in a statement.
According to AAA the average price of regular-grade gasoline in Michigan is $3.18 per gallon at the time of reporting.
“We have more to do. We will keep fighting to lower costs by building millions of new homes, lowering health insurance premiums, and making child care more affordable,” Biden said.
While the PCE price index is nearing the 2% target, September marked a .2% increase in prices from August. However, personal incomes across the U.S. also increased .3% from the previous month.
On its own, Michigan has also made considerable progress in recovering from the economic downturn of the pandemic, as detailed in the state’s 2023 economic analysis report.
While the state has reached its lowest unemployment level in 20 years, job growth has slowed and inflation has undercut rising wages. While average hourly earnings in Michigan’s private sector rose from $26.40 in June 2019 to $32.15 in June 2023, inflation has resulted in a .7% decrease in real earnings, according to the report.
However, real wages are growing for the majority of workers across the nation due to a strong labor market and easing inflation, Jared Bernstein, a member of the White House Council of Economic Advisers, told the Advance on Thursday.
While experts said much higher unemployment or much slower growth of the United States’ gross domestic product would be needed to get inflation under control, Bernstein said the nation’s low unemployment, job growth and GDP growth have defied those expectations.
“Lots of progress in the right direction, but our work isn’t done. Precisely, the issue of costs remains big. There are too many families facing too many high prices. So we’re going to keep doing all we can to relieve those cost pressures, for health care, for housing, for child care, prescription drugs and so on,” Bernstein said.
Of the largest contributors to September’s increase in current-dollar consumption expenses, health care, housing and utilities were the greatest contributors to the increased costs of services, while nondurable goods — led by prescription drugs — alongside food and beverages, and motor vehicles and parts were the biggest contributors to the increased cost of goods.
While the increased costs of goods like auto parts was partly a function of supply chains, those costs have come down quite sharply, even falling in some cases as those supply chains have unsnarled, Bernstein said, pointing to housing and services as the main factors placing pressure on inflation.
Additionally, one of the important ways the White House can support Michigan is through workforce development, Bernstein said, pointing to $35 million in federal funds granted to the Michigan Department of Labor and Economic Opportunity (LEO) to support the jobs building electrical transmission and clean energy infrastructure as well as auto jobs.
The Biden administration has also launched a workforce hub in Michigan, bringing together industry, government, colleges, unions, to help workers access good jobs, Bernstein said.
There has also been increased interest in producing clean energy technology, batteries, electric vehicles and semiconductor in the United States, stemming from laws like the Infrastructure Investment and Jobs Act, the Inflation Reduction Act and the CHIPS and Science Act, Bernstein said.
While it can take time to get these facilities built and running, these efforts have already produced construction jobs in Michigan, Bernstein said.
As Michigan’s clean energy industry expands, the state is helping workers with the transition
Between June 2023 and June 2024, Michigan added 13,800 additional construction jobs, according to the 2023 Michigan Economic Analysis Report.
“Once those factories are built, we expect to see equipment investment and manufacturing employment,” Bernstein said.
Additionally the Biden administration is working to keep gas prices and unemployment low, while keeping real wages up and inflation down.
“Help people today with our cost cutting agenda and help families and communities tomorrow with our investment agenda,” Bernstein said.
YOU MAKE OUR WORK POSSIBLE.